EP379 How Canadians Should Pay Themselves from a U.S. Company with Kristopher McEvoy

A Canadian Investing in the U.S. with Glen Sutherland

In this episode, Glen Sutherland is joined by his personal accountant, Kristopher McEvoy, a Canadian CPA specializing in cross-border taxation. Kristopher works with clients investing in U.S. real estate, as well as those relocating or expanding businesses between Canada and the U.S. The discussion centers around a frequently asked question: what’s the most efficient way for Canadians to pay themselves from their U.S. real estate or business income? Kristopher explains that the answer depends on the ownership structure: If using a U.S. Limited Partnership (LP): You’re taxed annually on profits—not on withdrawals—so taking money out has no further tax consequences. If using a U.S. Corporation: Paying yourself personally via dividends or payroll can be highly tax inefficient, with a potential combined tax burden of up to 50–60%. A more efficient strategy involves using a Canadian corporation to own the U.S. corporation, enabling: Management fees Interest charges Intercompany dividends (typically subject to only 5% U.S. withholding tax under the current tax treaty)